Scottish Widows hopes to increase retirement engagement among young people with £100m digital investment

Scottish Widows is looking to boost pension engagement by launching a revamped app and TikTok channel to raise awareness among young people about their pensions.

The life insurance and pensions company says it is investing £100m to enhance its digital offering, including the launch of its TikTok channel ahead of ‘pension engagement season’, This is Money can reveal.

According to data from Scottish Widows, a staggering one in four twenty-somethings are not saving anything for retirement, and 38 per cent of twenty-somethings are not on track to save enough money to cover their living expenses.

Jackie Leiper, director of Scottish Widows, told This is Money: ‘People use their online banking accounts almost every day.

‘We know that pensions and investments don’t come close to that level of interaction and human involvement.

“The investment we’re making is focused on creating a digital ecosystem and an experience that allows people to not only view their products with us, but also connect their accounts with other providers.”

Scottish Widows hopes to reach viewers, particularly young people, who are interested in improving their retirement by launching a TikTok channel. They want to make a real difference before it’s too late.

Leiper added: “When you’re in your 20s, you don’t really think about retirement, right? But we actually know that people in their 20s and 30s can make the biggest difference by taking small steps.”

According to Leiper, people generally don’t start paying attention to their pensions until they are in their forties. ‘At that point, they only have a short time to really make a difference or take action.’

In partnership with TikTok, Scottish Widows found that searches for “#retirementplanning” were up 300 percent year-on-year in the first quarter of 2024, while “#retirement” was up 60 percent.

Meanwhile, 81 percent of TikTok users said they wanted to learn more about personal finance, while a third actively searched for this type of content on the platform.

The tag ‘#retirementplanning’ was viewed more than 10 million times in the first quarter of 2024.

According to Scottish Widows, young people can get the most out of their pensions if they start working early in life. If the age limit for auto-enrolment is lowered to 18 and the income limit is reduced, savers could add an average of £46,000 to their future pension pot. That’s a 45 per cent increase.

“The generation of people in their 20s and 30s don’t have the luxury pension plans that my generation may have had. The steps they can take now can really make a big difference for them,” Leiper said.

“The TikTok channel is quite experimental, but it shows that there is a demand for it. If we can be where people are going, that’s probably our best chance to make the biggest difference.”

In addition to the TikTok channel, Scottish Widows is also revamping its brand and app, including the introduction of gamification features. The company hopes to use these to explain difficult concepts to users in a simple way.

The company’s compound interest in-app game launched just a few weeks ago and has already attracted 53,000 visitors, which equates to one in five app visitors.

Leiper said the games ‘beat the gap’ and ‘pension mirror’, meanwhile, ‘have had great engagement and have really helped to simplify the messages and help people make decisions more easily.’

“The gamification team is miles ahead of our competitors and no one else is doing this in the pensions and investment sector, certainly not in the UK,” Leiper added. “Most people wouldn’t expect this from a fairly traditional business like ours.”

Scottish Widows is currently recruiting a full gamification team, with the aim of creating standalone games that anyone can use, and expanding their functionality into other aspects of the business.

“Ultimately, what we hope is that people will take steps to close the gap that they have so that they have what they need for retirement,” Leiper said.